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Robust (?) approach (by churches) to fossil fuels required

On 15th April 2016 the Church Times (house paper of the Church of England) published an article

Robust approach to fossil fuels required

by Dr Hannah arguing that the churches need to bear down hard on fossil fuel firms. This reflects the view of Operation Noah, a Christian group very concerned with climate change and through its off-shoot Bright Now pushing for fossil fuel divestment by the churches.

In early 2015 Bright Now produced the argument for divestment which can be seen here;

The argument is very one-sided and looks to Lord Stern and the Centre of Alternative Technology‘s arguments for Zero Carbon. Any other argument, such as that of dieter Helm in The Carbon Crunch simply is not mentioned. Its description of fracking is simply woeful.

As I was not happy with article I wrote a brief letter which was published on 22nd April;

Dear Sir

A more robust approach to fossil fuels

Having recently given a paper at an international conference of the AAPG (American Association of Petroleum Geologists) in Spain, I found the article “Robust Approach to fossil fuels required” (CT 15/4/16) rather inadequate and strident. It reflects the current phobia of fossil fuels with realising there are no alternatives in the foreseeable future. Concern for the planet is essential but it must be grounded in realism.

Fossil fuels will be used way into the 22nd century whether we like it or not and the key is to use them in an environmentally sensitive way. Thus coal needs to eliminated as soon as possible and natural gas must be seen as the best/least worst replacement either as a bridge fuel or having a permanent place (hopefully with CCS). Few commentators expect fossil fuels to be replaced by 2050 if at all, and are thus not going to be stranded assets. (petroleum companies will change drastically in the next decades.)

I found the article both biased and in places inaccurate (as over claims that petroleum companies have almost all the necessary expertise for CCS). Much of the “robust approach” is simply ill-informed attacks on oil and gas, as is seen over fracking on onshore oil and gas in the UK. Sadly too many Christian green groups repeat the inaccuracies of the green NGOs, Naomi Klein and others, and that includes Operation Noah.

Rather than “robust approaches”, which are often inaccurate and ideological attacks on ALL fossil fuels, all in general, and the churches in particular, need to consider what are the best (or least worst) energy solutions for the present rather than to have blind faith in renewables, which at present produce less than 5% of the worlds energy. To go from 5% to 100% will take many, many decades. As Prof Dieter Helm recently pointed out, we have no alternatives at present and need to go into to the future with a mix of energies, including nuclear, which is a no-no for many. Most importantly he emphasises the need for far more research in alternatives, rather than pinning our hopes on our present and limited renewables.

The “Carbon Bubble” will not burst and will either go to an environmental indifference at great human cost or the development of a greener energy mix. The pushing of green idealism and ideology makes the former more likely.

Sincerely

Michael Roberts

Unsurprisingly there were two letters in the Church Times today; one from Ruth Jarman of Operation Noah, who is awaiting a court case for daubing paint over the DECC building in London. Here she is saying prayers after daubing the building.

Dr Hannah also replied, accusing me of having “a mindset, also found among executives of oil and gas multinationals”, which is an offensive statement as well as untrue. As he is an expert in Second Temple Judaism, I am sure he would welcome Francis Egan , John Dewar or any other leading oil or gas executicve to present a paper on second Temple Judaism at a theological conference.

I was not surprised at these two reactions from members of Operation Noah, but it does show I touched a raw nerve.

I have to say I am very concerned at the way groups like Operation Noah are misleading the church at present and this is not helped by Rowan Williams supporting the Cambridge University Zero Carbon Society, who published their report this week http://zerocarbonsoc.soc.srcf.net/ with Rowan writing a supporting preface. He may know his theology but not his energy issues.

I reckon that poor “Christian” arguments like thes actually do no good for the environment and undermine the credibility of the church. I am afraid the various churches have been very naive over both Climate Change and fracking and just jumped onto MCkibben’s 350.0rg divestment program.

Fortunately I am not alone in my opposition to such ideas on divestment or fracking, but few are prepared to put their heads above the parapet. The weakness in the church is that they ignore those who actually have some knowledge of the extractive industries, which are regarded as dirty and capitalistic. Here the gospel of St Naomi Klein is of more importance than that of Jesus Christ.

Blog

Following the Church of England’s decision at last year’s General Synod to pursue a policy of ‘robust engagement’ with fossil fuel companies rather than disinvestment, Operation Noah trustee The Revd Dr. Darrell D. Hannah wrote the following article for the Church Times outlining what ‘robust engagement’ would truly require to keep global temperature rises below 1.5°C. Operation Noah’s Bright Now campaign continues to call on UK churches to fully disinvest from fossil fuel companies.

Robust approach to fossil fuels required

The Church must keep up the pressure on oil and gas companies, arguesDarrell Hannah

Much has changed in the past ten months. The recognition by the nations participating in the UN climate summit in Paris, COP21 (News, 11 December 2015), of the need to keep the world’s temperature rise to under 1.5°C has revealed an urgency that has often been lacking until now: it has changed the game with regard to even the medium-term viability of oil and gas multinationals.

To keep below a 1.5°C rise, about 85 per cent of all fossil-fuel reserves must remain in the ground. The 2.0°C target required about 80 per cent of all fossil fuels (88 per cent of coal reserves, 35 per cent of oil and 52 per cent of gas) to remain unburned.

Not surprisingly, investors and market analysts speak of ‘a carbon bubble’ and ‘stranded assets’ with regard to fossil-fuel companies. For any corporation 80 per cent (or 35 per cent or 52 per cent) of whose assets are untouchable must be deemed a risky investment. Now, with the world committed to less than a 1.5°C rise, even more of those assets are in danger of being stranded, and the bubble has grown larger.

In addition, the number and severity of extreme weather events have increased. The excessive rain and floods in the north of England and Scotland in January this year are the fourth such ‘once-in-a-lifetime’ or ‘once-in-a-century’ weather events in the UK since 2000 (News, 1 January). Similar patterns of extreme floods, and/or droughts, and subsequent wild fires, have occurred in North America, Australia and North Africa. The past year, 2015, was unambiguously the hottest globally on record, with 2005, 2010 and 2014 tied for the next hottest year.

We should also consider the implications of the current migration crisis in Europe. The 2006-09 drought in Syria was one of the stress factors that led to its continuing civil war, which in turn has contributed significantly to the unprecedented number of immigrants seeking entrance into Europe. It is increasingly clear that it is not just poor nations that will be affected by climate change. We are already beginning to experience the consequences in Europe.

Nonetheless, the oil and gas companies continue to conduct their business as if nothing had changed. BP’s recent report Energy Outlook 2016 Edition: Outlook to 2035 tacitly acknowledges the need for change, but puts the onus on governments. Moreover, the report predicts that the demand for oil and gas will increase in the coming decades. In view of the decisions made at the Paris climate summit, this must be deemed environmentally and financially irresponsible.

In the light of the Paris summit, the worsening effects of climate change and the business-as-usual attitude of the industry, a small working group of those responsible for the Oxford and Birmingham diocesan disinvestment motions met to discuss what ‘robust engagement’ should look like in the current context. This is a summary of our discussion.

Last year, the EIAG’s initiative, Aiming for A, succeeded in getting resolutions calling for enhanced disclosure of carbon emissions passed, with large majorities, by shareholders’ meetings of both BP and Shell. Exxon refused – and is still refusing – to consider such a resolution.

Thus, with the EIAG’s encouragement, Shell and BP (but not Exxon) have promised to disclose just how much carbon their operations emit. It is now essential that these companies, as well as others, progress to actual reductions in carbon emissions – and not just more promises of further disclosure – or EIAG’s much heralded Aiming for A will be deemed a failure.

Oil and gas multinationals must also radically reduce exploration. Since, as noted above, approximately 85 per cent of known fossil-fuel reserves must remain in the ground if we are to have any chance of remaining below a 1.5°C rise, it is senseless for multinationals to continue to outlay more than $300 billion annually, which they spent in the past two years for which records are available (2012 and 2013), in the search for more oil and gas reserves.

Any future exploration in sensitive areas, such as the Arctic and certain coastal regions, must be avoided altogether. Furthermore, it follows just how spurious is the claim – which was made, for example, at the General Synod meeting in July – that companies need to continue some limited exploration because many of their reserves are situated in difficult locations where extraction is expensive.

Even if this were accepted, it is obvious that the $300 billion spent annually would still be excessive. Oil and gas companies have been exploring for the best locations for more than 100 years. The primary reason that they have been forced to search in less advantageous locations, such as deep sea and the Arctic, is because the unproblematic locations have already been exploited.

Since the vast majority of fossil-fuel reserves are unburnable if the world is to avoid a 1.5°C rise, more radical and imaginative ways of thinking must be considered by the oil and gas multinationals. To an objective observer, their long-term future in their current form must be regarded as extremely questionable.

Therefore, if they are to be ethically responsible towards their shareholders, they need to move to a ‘harvest mode’ of operation, bringing exploration to an end, and progressively reducing oil and gas production. This could either result in increased dividends, as the capital value of the company is returned to shareholders over time, or it could be coupled with diversification into renewables, more efficient battery storage and carbon capture and storage (CCS), where oil and gas companies already have almost all the necessary expertise.

The companies should consider converting their petrol stations to the re-fuelling of electric or hydrogen vehicles. The flirtation with renewables by a few oil and gas multinationals a decade or so ago and their current pitiful level of investment in CCS appear to be no more than exercises in public relations. ‘Robust engagement’ would seek to convince the oil and gas companies that the transformation of such image management into their core business models is their only hope of survival.

It is also essential that these companies begin the process of moving jobs from oil and gas production to renewables and CCS. Oil and gas multinationals could potentially be a powerful voice with governments. Instead of spending significant resources lobbying governments to protect their subsidies and their current rates of emissions, they should concentrate their lobbying efforts on influencing governments to seize this moment of change, and support renewables, CCS and electric or hydrogen vehicles.

Finally, ‘robust engagement’ must recognise the huge influence that these multinationals have with other players, especially state-owned oil and gas companies. State-controlled companies – such as Saudi Aramco, Gazprom (Russia), the China National Petroleum Corporation, National Iranian Oil Company, Petróleos de Venezuela, Petrobras (Brazil) and Petronas (Malaysia) – own most of the world’s reserves of coal, oil and gas, while those companies listed on the world’s stock exchanges, such as BP, Shell and Exxon, among others, possess a much smaller market share.

Nonetheless, the division between the two types of companies is not as great as it seems. Many of the largest state-owned companies float some of their stock, recruit non-executive directors from the publicly traded companies and contract these companies to help extract their reserves.

The immense influence that the listed companies have means that where they lead, state-owned oil and gas companies inevitably follow. Thus the multinationals need to be encouraged to take their leadership seriously, and to cease using their smaller share of the market as an excuse to avoid necessary change.

At a recent meeting in the Guildhall, attended by more than 2000 investment managers and asset-owners, it was suggested that companies such as BP, Shell and Exxon could soon go the way of Kodak, Blockbuster and Olivetti typewriters. This seems an incredible statement, until one remembers just how quick was the demise of these three commercial monoliths. If Shell and BP were to follow the example of Kodak and Blockbuster, the impact on the pensions of millions of ordinary individuals would be disastrous.

‘Robust engagement’ that is worthy of the name should include challenging oil and gas multinationals to make real reductions in carbon emissions now; to end nearly all exploration; to move to a harvest mode for the oil and gas parts of their business; to diversify into CCS, renewables and the servicing of electric and hydrogen vehicles without delay; to begin moving jobs towards renewables and CCS; to lobby governments to invest in renewables and CCS; and to show real leadership in the industry, especially towards those in the state sector.

All this is necessary, most importantly, because of what the enormous threat of climate change means to God’s world and his children, but also because of the danger that the national investment bodies of the Church of England will lose many millions when the ‘carbon bubble’ bursts.

The Revd Dr Darrell D. Hannah is Rector of All Saints’, Ascot Heath, in Berkshire, and a board member of Operation Noah. This article incorporates contributions from the Revd Hugh Lee, Marilyn Hull and the Revd John Nightingale.

Having recently given a paper at an international conference of the AAPG (American Association of Petroleum Geologists) in Spain, I found the article “Robust Approach to fossil fuels required” (CT 15/4/16) rather inadequate and strident. It reflects the current phobia of fossil fuels with realising there are no alternatives in the foreseeable future. Concern for the planet is essential but it must be grounded in realism.

Fossil fuels will be used way into the 22nd century whether we like it or not and the key is to use them in an environmentally sensitive way. Thus coal needs to eliminated as soon as possible and natural gas must be seen as the best/least worst replacement either as a bridge fuel or having a permanent place (hopefully with CCS). Few commentators expect fossil fuels to be replaced by 2050 if at all, and are thus not going to be stranded assets. (petroleum companies will change drastically in the next decades.)

I found the article both biased and in places inaccurate (as over claims that petroleum companies have almost all the necessary expertise for CCS). Much of the “robust approach” is simply ill-informed attacks on oil and gas, as is seen over fracking on onshore oil and gas in the UK. Sadly too many Christian green groups repeat the inaccuracies of the green NGOs, Naomi Klein and others, and that includes Operation Noah.

Rather than “robust approaches”, which are often inaccurate and ideological attacks on ALL fossil fuels, all in general, and the churches in particular, need to consider what are the best (or least worst) energy solutions for the present rather than to have blind faith in renewables, which at present produce less than 5% of the worlds energy. To go from 5% to 100% will take many, many decades. As Prof Dieter Helm recently pointed out, we have no alternatives at present and need to go into to the future with a mix of energies, including nuclear, which is a no-no for many. Most importantly he emphasises the need for far more research in alternatives, rather than pinning our hopes on our present and limited renewables.

The “Carbon Bubble” will not burst and will either go to an environmental indifference at great human cost or the development of a greener energy mix. The pushing of green idealism and ideology makes the former more likely.